Article content
Ontario Premier Doug Ford says the federal government should consider blocking oil exports to the United States to give Canada leverage in the trade war that’s now hitting that province hard.
Sign In or Create an Account
or View more offersArticle content
“Even if the federal government buys the oil and puts it into reserves, that’s what we need to do until they feel the pain,” Ford told reporters on Tuesday last week.
Article content
Recommended Videos
We apologize, but this video has failed to load.Try refreshing your browser, or
tap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, or
tap here to see other videos from our team.Article content
Alberta Premier Smith, who wants to double oil production, pushed back the next day with a special address.
Article content
Story continues below
This advertisement has not loaded yet, but your article continues below.
Article content
“Although I understand the need to respond strongly to these tariffs, I cannot think of a more disastrous policy decision than cutting off or taxing Alberta’s oil to the United States,” she said.
Article contentArticle content
This means the metaphorical taps are now in Prime Minister Mark Carney’s hands. But can Carney really cut off or put an export tax on Alberta oil without violating the constitutional division of powers? The answer is probably yes, but don’t expect Alberta to go down without a fight.
Article content
The Constitution Act of 1867 assigns all matters that governments may regulate exclusively to either the provinces or the feds, and provides a residual power to Parliament to “make laws for the peace, order, and good government of Canada, in relation to all matters not coming within the classes of subjects by this act assigned exclusively to the legislatures of the provinces.”
Article content
It’s not always easy to assign a matter exclusively to one level of government. The court has developed certain rules to deal with this reality, but it’s not always clear how they will be applied. For example, if two laws are in conflict and it’s impossible to comply with both laws, the federal law may prevail under the doctrine of paramountcy. That said, if a law intrudes on the “core” or the “basic, minimum and unassailable content” of the other order of government’s powers, it may be deemed inapplicable under the doctrine of interjurisdictional immunity.
Article content
Story continues below
This advertisement has not loaded yet, but your article continues below.
Article content
One thing that’s clear under the Constitution is who owns the oil (and forests … and potash). Canada transferred ownership of natural resources to the Prairie provinces through the Natural Resources Transfer Agreements and related acts, which became part of the Constitution in 1930.
Article content
It’s also clear that Alberta has exclusive control over the “development, conservation and management of non-renewable natural resources and forestry resources in the province.” That’s from the text of Section 92A, which was added to the Constitution Act of 1982 at Alberta’s insistence.
Article content
If the provinces own their natural resources and have control over their development, how can Ottawa impose embargoes or taxes that would stifle their sale or development?
Article content
It turns out, Ottawa would have a number of strong arguments. First, it could point to the 1982 Supreme Court decision in the Exported Natural Gas Tax Reference, where the court examined a federal tax proposed by the Pierre Trudeau government on natural gas, including on exported natural gas, which Alberta opposed. Alberta argued that Section 125 of the Constitution Act of 1867, which says, “No lands or property belonging to Canada or any province shall be liable to taxation,” blocked the proposed tax. The Supreme Court ruled that the proposed tax was a valid exercise of the federal taxation power outlined under Section 91(3) of the act.